Holiday Attacks – what the government is not telling you!

Many condolences to the many families and friends that have been affected by the killings in Tunisia. Also to the many ordinary Tunisian’s  who want to live their life in peace!

So how do these terrible events happen?

The UK government certainly does not tell its citizens the full story which goes back many years. Post world-War II there were two great powers: America and the USSR. America’s top foreign policy was to stop the spread of communism, secure oil contracts and promote western values in Arab countries. While Europe became protected under America’s nuclear program the America saw authoritarian Arab governments the best deterrent to stop the spread of communism. Western governments then proceeded to prop up these governments for self-interest and their own benefit. Arab states became reliant on oil income which counted for up-to 90% of their income. Economists call this type of economy “rent” as it is the term for income acquired by states from sources other than taxes.

In the late 1970’s and early 1980’s the free market economy became prevalent, many of these countries in return for loans from the World Bank and other Western Institutions had to implement economic reforms and later on privatisation. Yet, the majority of this money was passed down to those already in power or to their family members. There was little distribution of wealth for the general public.

When the Arab spring began again Western governments felt it was the opportunity to bring Western style democracy to these countries that had never experienced such a system. It was bound to fail! Since the end of World-War II there has been endless Western interference into Arab states. It is a fact that 80% of all arms production from the West goes to states we currently class as rogue or have been in conflict with recently. The West has interfered economically, also military, that it is hardly surprising we have the rise of groups like IS.

The ideology of IS is something many of us can’t stomach but for their supporters it’s very logical. For them, it’s payback for all years of Western interference. This is something Western governments will not tell you – that their hands are on the current situation. The UK have sent troops to kill, (in the Queens name), they send “in their eyes” troops to kill in the name of Allah and when you get down to the nitty gritty of the situation there is not a lot different in the minds of both camps.

In my last piece of work I wrote that I do not see things getting any better – in-fact, I see things getting worse. The single gunman is rarely predicted and all Western society could be a target. It’s a sad state of affairs when people are not free to travel and gain experience from different cultures.  Our world however is sadly becoming dangerous place.

With refuges increasing, armed groups increasing, pressure will mount on governments so they will increasingly take draconian measures which supress freedoms and increasingly control the news. The outcome in the end is that society will break down.

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They should Have Gone!

SNPSo Scotland lost their nerve and decided to stay within the UK. A once in a life-time opportunity to grab hold of their own destiny and they have blown it! The referendum for the Conservative Party  was always going to be a win, win, situation. A ‘yes’ vote –and apart from the initial The Prime Minister has lost the Union shock horror – would have meant Scottish MP’s being consigned to Scottish Parliament. A ‘no’ vote has meant the ‘West Lothian’ question is at the forefront of Tory minds but both outcomes will lead to more Conservative governments in the UK. Why? Because the ‘West Lothian’ question now has to be answered.

Labour were always going to lose. Now they are fighting to keep their 41 or so Scottish Labour MP’s with some sort of power in Westminster for as long as possible. However, Labour in the end will have to re-invent themselves if they are ever to be elected within England again after the next general election in 2015.

But the big question Labour MP’s must ask themselves: do you really think Conservative MP’s will let a failed former Labour Prime Minister in Mr Gordon Brown dictated the pace and terms of any devo option? The answer is going to be a big fat ‘NO’!

Lib Dem LeaderThe English must now demand English MP’s voting for English items as their prize.  If Labour win the next general election with Scottish MP’s, they will be in the position of being in power but not been able to push any of their English policies through the House of Commons. England could be government less from 2015!

Alex Salmond has done a great service, not only to Scotland but also to England, who must now can take control over English matters. Whatever Labour says, they are not in the driving seat, and it will take longer than the pledge (or should I call it the bribe) the leaders gave before the referendum.  Scottish people forgot a pledge in politics means little, just remember the Nick Clegg on tuition fees just before the last General Election.

I’m sure they will be some political fudge about Scotland and England but MP’s have to realise the UNION is dead but all in name!

So what is new?

As we are just over through way through the party conference season here in the UK. So what has been the main policy announcements?

For the Liberal Democrat’s free school meals for all children in years 1 and 2 saving parents about £400 a year per child. The scheme will cost the tax payer around £600m per year. The announcement was welcomed by the Child Poverty Action Group, many parents, and the Chair of Local Caterers Association. It was seized upon by the opposition because not only those parents of the less well off would receive the benefit so would sons and daughters of rich bankers, footballers and millionaires. It sort of made the policy rather bananas! As one group stated “There is no such thing as free lunch, especially one doled out by a politician”. This announcement means taxing those on low and middle incomes to pay for hand-outs to affluent families. It’s incredible to see it proposed by Nick Clegg, who was, until very recently, rightly arguing against universal benefits for wealthy households.

Twenty months will tell if this is the right policy or if polls are correct and the Lib Dems seats in parliament as predicted will be halved.

The big announcement from Labour was a 20 month freeze of gas and electricity prize while reforming the power regulator. Tories and powers companies were quick to point out ‘Red Ed’ was back and Labour were taking us back to the 1970’s, with power cuts and black-outs. The big energy companies fail to mention they have been over charging business and domestic customers by manipulating the market by a tune of 125m per year for at least the last 5 years.

The Tories would ever admit to do such as thing because it would be an acknowledgement that privatising the energy market was a complete failure. Michael Portillo on this Thursday’s ‘This Week’ stated it made on economic sense to fix prices. So all those -like myself – who have been on a fixed pricing plan (in my case 2 years) don’t know about economics? The point is the policy may help those who pay day-to-day via meters. Many already have fixed term deals so I hardly think the lights will go out!

Buried within these announcements was a commitment to lower the voting age to 16.

Not wanting to be outdone the Conservative Party would like to take the country back to the 19th century by announcing tax breaks for married couples. The prime minister said four million couples would benefit from a £1,000 transferable tax allowance from 2015. Conservative Health Secretary Jeremy Hunt said the policy recognised the value of the institution of marriage.

Shadow chief secretary to the Treasury Rachel Reeves said: “David Cameron’s so-called marriage tax break won’t even help two-thirds of married couples, let alone millions of people who are separated, widowed or divorced.

“He’s so out of touch he thinks people will get married for £3.85 a week.”

The battle lines for the next general election have been drawn – only 20 months to go!

No Booze we are British

It seems moves to introduce a minimum price for alcohol in the UK have run into trouble. Last week doctors’ leaders said a price of 50p per unit was needed to have any impact on people’s health.  David Cameron is championing the plans but others in the government are not so keen.

Comment: Latest reports involving 28 focus groups feel the measure will hit moderate drinkers and will do little to reduce binge-drinking. In-fact, some like the free-market think-tank the Adam Smith Institute believe any reduction in binge-drinking is based on ‘false assumptions and wild speculation’.

Comment:  The row over Andrew Mitchell, the chief whip continues with The Police Federation and Labour calling for an inquiry into the incident.

David Cameron stated he “has full confidence in Andrew Mitchell and said he had taken the “correct action” in apologising for his outburst at police”.

What can we make of the situation? Most people think the whole situation is rather ‘funny’ over one word ‘pleb’. Hardly the most offensive word in the English dictionary!

It would seem The Police Federation after the wave of sentiment after two police officers murdered last week sees an opportunity to do a little political bashing with the story being leaked to the Sun newspaper, surely by The Police Federation. Yet I would suggest a story is hardly in the public interest.

You can sort of forgive the Sun newspaper for the political stirring but what is most concerning is obsession with such a minor story. These people run our country and police force; surely they have much more pressing concerns than the word ‘pleb’? An inquiry will do little but I’d suggest with people in charge our country is in deep serious shit!

Summer Holidays Over

Summer Holidays nearly over and MP’s returning to Westminster after the recess. Chancellor George Osborne has spent his summer hols deciding how to stimulate growth in a flat-lining economy. With Plan A consigned to the dustbin Mr Osborne today announced £50bn of private sector building.

Labour should be jumping for joy as the Coalition have decided what they have been saying the past year is in-fact correct;  the way out of recession is to borrow.

The coalition in 2010 cut 50% of the Affordable Housing budget but with 2011 completions and 2012 start on sites lower that any year Labour was in power the coalition have decided to inject 10bn in the hope the country will build itself out of recession.

It however, remains to be seen if any projects get off the ground as strict rules of apply and all have to start within the year. To do this the coalition will reform planning laws just 6 months after reforming them.   So only if they can reform the expensive appeals process will this make any difference. Yet there goes another Coalition policy as out of the window goes localism!

So two and a half years of saying no policy change.  The Chancellor finally admits plan A is a failure and his gamble has lost. So his solution is a 180 degree turn around and a gamble that this time it will work. Two and a half years wasted  and just two and half to go before the next general election?

Bets please?

Chancellor to win or lose

It’s time for a policy rethink

Comment: The UK government issued another round of bank lending in the hope that this money is filtered out to small business in cheap loans. The Coalition’s Programme for Government set out that deficit reduction, and continuing to ensure economic recovery, is the most urgent issue facing Britain.  The government’s response was to cut spending, increase VAT, and to increase the pension age. But has the government fundamentally got their sums wrong and is it time to rethink policy?

The new money the Bank will now offer cheap loans to banks on the basis that they increase lending. This will make it easier and cheaper for banks to borrow at least £5bn every month to cover any shortfalls in cash.

New money may provide short-term bank liquidity but at long-term expense. Currently private pension schemes are in deficit. According to the Pension Protection Fund (PPF) deficits have reach 312bn with only 929 of the 6,432 schemes currently in surplus.

Many private pensions buy government gilts but with the influx of printed money yields have fallen by 0.55 percentage point and overall 1.73 percent by May 2012. The National Association of Pension Funds (NAPF) continued to blame the Bank of England’s policy of quantitative easing for much of the recent ballooning of deficits.

The policy has been explicitly aimed at driving up the price of government bonds, which in turn depresses the returns they provide to investors, such as pension funds.

When it comes to retirement it seems many people will be disappointed with their payout. The government feels rising the retirement age will decrease its outlay on ageing population. Yet it will be false economy and only store up problems for future generations. As older people cannot retire until 67, 68 or 69, and will not be able to access a generous private pension they will hog jobs that younger people could fill. Those first years after school or university are important to mould young people into the work ethic. Two or three years of doing nothing they will be a lost generation relying on government handouts.

There are radical things the government could do to raise more capital but would be very unpopular. Extend VAT on newspapers (VAT is already charged on a newspapers internet business), VAT on children clothes, and abolish child benefit. They could also let some banks fail or as I would put it consolidation. At the same time they need to set a national price for fuel to keep consumer bills stable.

A UK GDP growth rate around 0.8 per cent this year I feel is still an optimistic outlook which I believe will be lower, a lot lower if the Euro collapses although we could still be a few years off a full collapse. However, it is coming!